Gp ratio

This query is : Resolved

aman (Querist)
Follow

12 October 2012 The formulae of GP Ratio is
Gross Profit/Total Turnover*100

total turnover Rs10,20,000/-
(including sale of goods Rs30,000 at Rs 20,000)
So for the purpose of GP Ratio, whit will be the turnover.??

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
Follow

12 October 2012 Rs.1000000.

OM SAI SRI SAI JAI JAI SAI

aman

aman (Querist)
Follow

12 October 2012 But 20,000 is also the part of turnover.
Amt. of 10,000 is trade discount.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
Follow

12 October 2012 Turnover will be the total amount of sale. Turnover shall be Rs. 10,30,000. Discount of Rs. 10,000 shall be shown separately.

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
Follow

12 October 2012 Turnover for the purpose of GP ratio is Rs.1000000 but total turnover is Rs.1020000. Because of you are not in practice of trade discount for all. Specially you provided a customer only trade discount of Rs.10000 because of damages of such goods or any thing for that purpose we cann't adjust the GP for the specially sold goods. In case you combained such sales with the normal sales then GP ratio of the company or firm will decrease. However in your case specially sold goods is Rs.20000 i.e 2% of the normal sales so it may not make significant change in the GP ratio. So in the general case i told you turnover for the purpose of GP ration is normal sales. In case you providing trade discount to all the customer i.e for total turnover then you turnover is net of trade discount because of turnover defined excluding of trade discount if it is allowed at the time of sale and in the invoice. In case you allowing discount after the sales i.e at the time of settelment of payment or any other time but not through invoice then the turnover includes with discount.

OM SAI SAI JAI JAI SAI

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now